My New Blog

JUNE 16, 2010

Fitch Ratings Ltd. forecasts that most borrowers who get lower mortgage payments under a federal government program will default within 12 months.

Among those with loans that aren't backed by any federal agency, the redefault rate within a year is likely to be 65% to 75% under the Obama administration's Home Affordable Modification Program, or HAMP, according to a report to be released Wednesday by Fitch, a New York-based credit-rating firm. Almost all of those who got loan modifications have already defaulted once.

Diane Pendley, a managing director at Fitch, said the failure rate was likely to be high largely because most of these borrowers were mired in credit-card debt, car loans and other obligations.

The Treasury Department has said that among people who have been given loan modifications under HAMP, the median ratio of total debt payments to pretax income is still 64%. That often means little money is left over for food, clothing or such emergency expenses as medical care and car repairs.

"The borrower remains in a very high-risk situation," Ms. Pendley said in an interview. "The other debts don't go away."

A Treasury official said HAMP "is making a real difference in the lives of hundreds of thousands of homeowners." He said the government has reduced the risk of redefault by offering financial incentives to borrowers who remain current on loan payments.

Fitch based the redefault forecast on the performance of loans that were modified in the first quarter of 2009. Those modifications were done outside of HAMP, which took effect later in the year. But Ms. Pendley doesn't expect a major difference between the results of HAMP modifications and those made under lenders' programs.

Even if two-thirds of the loan modifications fail, Ms. Pendley said, that doesn't mean HAMP is a failure. "If you can save one-third of the borrowers, I think it is worth the exercise," she said. She also said the HAMP program, announced in early 2009, had provided a basic outline for loan servicers to follow in modifying loans. Loan servicers, often owned by banks, collect payments and handle foreclosures. Previously they were "all over the place" in their methods for dealing with foreclosures, Ms. Pendley said.

At the end of April, about 295,000 households were benefiting from long-term modifications under HAMP, which typically involves cutting the interest rate as low as 2%, according to the Treasury. Another 637,000 households were in trial modifications, under which they need to show they can make their new, lower payments consistently and provide documents proving they are eligible. Under the $50 billion HAMP program, the federal government provides financial incentives to borrowers, loan servicers and mortgage investors for modifying loans.

Andrew Jakabovics, an associate director at the Center for American Progress, a Washington think tank with ties to the Obama administration, said results of HAMP so far were mixed. Borrowers continue to complain that it often takes months, and sometimes more than a year, to get decisions from servicers on whether a loan can be modified on a long-term basis. Mr. Jakabovics said the program would work better if the government dealt directly with applicants for HAMP and decided which ones qualified, rather than delegating that function to servicers.

But Mr. Jakabovics said he didn't expect major changes in HAMP, which is scheduled to remain in effect through 2012. "For better or worse," he said, "what we've got now is what we're going to go with."

Another change being put into place for properties that have been foreclosed on and making sure that the redemption period has been expired before Fannie Mae will allow financing on this property.

Fannie Mae will consider this a Title Defect and not allow for financing.... watch the video by Think Big Work Small - Frank & Brian are a great wealth of knowledge and they have a pdf of Fannie Mae announcement: HERE IS THE LINK! http://www.thinkbigworksmall.com/mypage/archive/1/51023 

I would encourage all to watch this video! Thank you!

How could one man be so smart about the future this many years ago?

THIS IS SO RELEVANT !!

John F. Kennedy held a dinner in the white House for a group of the brightest minds in the nation at that time. He made this statement: "This is perhaps the assembly of the most intelligence ever to gather at one time in the White House with the exception of when Thomas Jefferson dined alone." Especially read the last quote from 1802. When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe . Thomas Jefferson The democracy will cease to exist when you take away from those who are willing to work and give to those who would not. Thomas Jefferson It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. Thomas Jefferson I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. Thomas Jefferson My reading of history convinces me that most bad government results from too much government. Thomas Jefferson No free man shall ever be debarred the use of arms. Thomas Jefferson The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government. Thomas Jefferson The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. Thomas Jefferson To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical. Thomas Jefferson Thomas Jefferson said in 1802: 'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered.'

Default Notices Down 27%, but REO Sets New Monthly Record

Even with a substantial drop in default notices in April, real estate-owned hit a record monthly high with a total of 92,432 properties repossessed by lenders, up 1% from March and up 45% from April 2009, according to RealtyTrac.

The foreclosure tracking website, based in Irvine, Calif., said a total of 103,762 properties received default notices in April, a decrease of 12% from March and down 27% from a year ago.

“We expect a similar pattern to continue for most of this year with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties,” said CEO James Saccacio.

Mortgage Bankers Association

A study by a Florida research firm says that the Seattle area’s economy is the best in the country.

According to Policom Corp., an independent economic research firm that specializes in analyzing local and state economies, out of the nation’s 366 metropolitan statistical areas, Seattle-Tacoma Bellevue rates No. 1, moving up from last year’s No. 12 ranking. In 2006, Seattle-Tacoma-Bellevue ranked No. 51 in the country. The company uses 23 different economic factors to create its rankings.

According to Policom, the highest-ranked areas have had rapid, consistent growth in both size and quality for an extended period of time. The lowest ranked areas have been in volatile decline for an extended period of time and Policom has created economic strength rankings since 1996.

Here are the nation’s top 10 markets of all 366 markets.

2010 Ten Strongest Among 366 Metropolitan Areas

1. Seattle-Tacoma-Bellevue.

All,

This new proposed bill called H.R. 5072 that is being created / endorsed by U.S. Congresswoman Maxine Waters, we need all to write your local representatives to stop this Bill H.R.5072. This bill is looking to increase FHA mortgage insurance from the now .55% monthly mortgage insurance to an outrageous 1.55% per month monthly mortgage insurance.

The impact of this Bill H.R. 5072 will be so costly to the new First Time Home Buyer or anyone that is looking to refinance that even if the rates are low by having this new increased mortgage insurance is like increasing the interest rates... click this video link that will demonstrate what happens to someone that is if they are borrowing for a loan at 5% on a 200,000.00 loan and what this will do to the home buyers. The link is by the guys Frank Garay & Brian Stevens form Think Big Work Small. Here is the link.... http://www.thinkbigworksmall.com/mypage/player/tbws/28066/1338551

The FHA loan program is one of our most stable mortgage products out there in the mortgage market today, and if we allow this Bill H.R. 5072 to pass this will only hurt our already distressed real estate market.

Please everyone pass this along, reblog, tweet, facebook this article, pass this along to anyone and everyone you know, we need to have this Bill H.R. 5072 not pass.

Every taxpayer in Washington State will be directly or indirectly affected by massive changes to the Revenue Act of 1935....

Living in Washington State has just gone up for living here see the link to look over all the new changes to your now new tax costs!

Most folks that I have spoken with did not know of these new added costs and tax increases.

http://oregonbusinessreport.com/2010/04/washington-states-30-new-tax-laws/

Here are a few examples of revenue tax increases.

  In the next twelve months, if you have a service business (there are few exception for hospitals and other service providers) you will likely see your B&O tax raised by 20% and in the aggregate, the service group will pay an additional $241 million dollars in new taxes.

If your business formerly used the direct seller exemption, your industry sector will pay $155 million in new taxes per year

Lightning charged particles coming from the volcano - possible from ice from the glacier mixed with charged positive particles. These are some cool pictures!!! Had to share these. Extreme rare photos of this type of eruption.